Estimated reading time: 9 minutes
Managing a business in the Philippines requires careful attention not just on the operations, but also the most crucial documents needed to even run a business, particularly your business permit. The business permit renewal process this 2024 is essential for maintaining compliance and ensuring your operations run smoothly for the next year.
In this comprehensive guide, we will walk you through the steps necessary for renewing your business permit in 2024. From understanding the required documents to mastering the renewal process, we’ll cover everything you need to know to make this task as seamless as possible.
Whether you are a seasoned entrepreneur or a new business owner, this article will equip you with the knowledge to successfully renew your business permit and stay compliant with DTI’s regulations necessary to operate your business.
Read on to discover all the essential details on how to renew your business permit in 2024!
What is a Business Permit?
Business permits are crucial in granting permission to any individual or organization to engage in commercial activities within the country. The permit acts as an official authorization by the government in ensuring that businesses comply with local regulations and other operation requirements.
Who Needs a Business Permit?
Any business owner needs a business permit to perform commercial business within the local market. These permits can be secured from your local government unit (LGU).
Is It Important to Renew Your Business Permit, or Can It Be Done Another Time?
Yes, renewing your business permit on time is important. The annual renewal should be completed before January 20 of each year. So, it would be ideal to prepare the requirements 1-2 months before the deadline.
Undergoing the process of renewing your business permit contributes to the following reasons:
- Avoiding Penalties: Renewing business permits leads to businesses avoiding penalties and fines. Consequently, failure to secure a renewed permit can result in financial repercussions affecting your business.
- Ensuring Continuous Operations: Renewing your business permit also ensures uninterrupted operations. Maintaining updated permits helps businesses run smoothly and maintain a stable working environment.
- Government Regulations and Guideline Adherence: Permit renewal also reflects your and your business’s commitment to following government regulations. Undergoing annual renewal shows the business follows the latest, updated legal requirements for the following year.
What are the Requirements for Business Permit Renewal in 2024?
The specific requirements and associated fees for renewal vary and depend on your LGU. Because of this, businesses need to check with the LGU regularly for a more thorough list. However, most LGUs will require the following requirements for renewal of business permits in 2024:
- Barangay Business Permit
- Business Clearance for the previous year, as well as, its official receipt.
- Application Form
- Company Documents, which include:
- Community Tax Certification
- Latest Income Tax Returns
- Latest Audited Financial Statements
- Notarized Contract or Lease (If the business is renting space)
- DTI, SEC, or CDA Registration
- SSS, PAG-IBIG, and Philhealth Registrations of employees at the time of renewal.
- Renewed BIR Registration
How Long Does It Take to Renew a Business Permit?
The duration of renewing your business permit depends on your local government unit or LGU. Some take several weeks, while others only take a day to renew your permit for the year.
How to Renew a Business Permit
While renewing your permit looks different for every LGU, it generally starts with getting a barangay business permit or barangay business clearance. This is another certificate that should be renewed yearly before January 20. Here’s an overview of the general process:
- Get your barangay business permit renewal application form.
- Submit for assessment.
- Pay for your processing fee. Make sure to keep the Official Receipts, you will need them later at the LGU.
- Return to the barangay hall to claim your newly renewed permit
- Apply for a renewal application of the mayor’s or business permit at the LGU.
- Submit all the necessary documents to renew your business permit.
- Pay the processing fee. Again, don’t forget to file your receipts.
- Return to your LGU or city hall on the specified date they scheduled for you to claim your permit.
How to Renew Business Permit Online
Businesses can renew their permits online at the beginning of the year. If your area offers online business permit renewals, they typically have portals where you can submit your requirements. All you have to do is visit your LGU’s business permit online portal and follow the next steps:
- Download the application form
- Gather your necessary documents
- Pay for your renewal
- Screenshot the online payment confirmation or receipt
- Submit the necessary documents and proof of payment to the portal
Note that this may vary per LGU. Thus, it’s important to visit your local government’s website for official instructions.
Additionally, not all LGUs offer online renewals, and processes may vary per unit. Here are the areas that offer online renewals:
- Antipolo
- Manila
- Muntinlupa City
- Malabon City
- Navotas City
- Parañaque City
- Quezon City
- Valenzuela City
- Taytay, Rizal
- Imus, Cavite
- General Trias, Cavite
- Cagayan de Oro
- Cebu
- Davao
- Dumaguete
- Panglao
- Carigara, Leyte
What are the Fees I Need to Pay to Renew My Business Permit?
The renewal process requirements also include payments for associated fees. One of the most important is the annual registration fee of Php 500. Additionally, you and your business need to pay these fees to obtain the following documents below for the renewal process:
- Local Business Tax (LBT). Computed based on your business’s gross sales from the previous year. It may vary from city to city, but it typically does not exceed 3%.
- Sanitary Inspection Fee. Depending on your LGU, the sanitary inspection fee can vary. Some LGUs base their fees on the number of rooms in the building. In Mandaluyong, it costs ₱880 for 150 rooms or less. Some LGUs also price this fee based on the professional performing the inspection.
- Garbage Fee. Payment required as contribution to your city’s garbage collection efforts. While it also varies from area to area, for businesses, it typically costs ₱100/month.
- Building Inspection Fee. Also varies by area and is usually a percentage of the total expense from last year. For the electrical building inspection, it is usually priced at 10% of last year’s total electricity bill.
- Mayor’s Permit Fee. Can range from ₱1,000-₱5,000 pesos per year. The rate would depend on your business size, location, and type of business.
- Zoning Fee. Total rate would depend on the overall project cost. In some cities and municipalities, businesses costing more than ₱2,000,000 would have to pay ₱7,200 and an additional 1/10 of 1% of cost in excess of ₱2,000,000.
- Other required fees imposed by your LGU
When is the Deadline for the Annual Renewal of Business Permits?
The business renewal process officially starts on January 2 and lasts until January 20. The dates are set automatically on the same days annually. While the process of renewing a business permit generally takes one to two weeks, some LGUs and offices can release the permits within the day.
What is the Penalty for Late Renewal of Business Permit in the Philippines?
Any business permit renewal delays would result in penalties for your business. These fines can cost your business 24% of the taxes not paid on time and an additional 2% interest rate per month.
Important Reminders for a Smooth Business Permit Renewal Process
To avoid hefty penalties, it would be best to prepare 1-2 months before the business permit renewal deadline. This ensures that you have all the necessary paperwork to continue operating your business for the year.
Moreover, there are several permits to secure before getting your new business permit. So, ensure that all the pre-requisite documents are filled out before applying for a renewal at your designated LGU. A few important reminders include:
- Adding the total cost ahead of time to ensure a smooth payment transaction.
- Bringing a pen in case there are more forms to fill out, or you missed some when you reach the LGU.
- Getting to the LGU early to avoid the long queue. This also ensures you have extra time in case you need to comply with other requirements.
- Ensuring all your documents are present before heading out and making extra copies.
How to Renew Business Permit in the Philippines: FAQs
Here are some frequent questions regarding the renewal of business permits annually and related concerns.
Small businesses like sari-sari stores earning below ₱100,000 annually are often exempt. However, this may vary by local government.
Yes, most small businesses are required to secure a business permit to operate legally.
Yes, all businesses, regardless of size, must register with the Bureau of Internal Revenue (BIR) to comply with tax obligations.
Yes, unless it earns below the threshold set by the local government, typically ₱100,000 annually.
As of 2020, a business permit is no longer a prerequisite for BIR registration.
Failure to renew may result in fines, penalties, and possible closure of the business.
No, the barangay can issue a Barangay Clearance, but the business permit must be obtained from the local government unit (LGU).
Yes, but only if allowed by zoning regulations and with proper permits, including a barangay clearance.
No, operating without a business permit is illegal and may lead to penalties or business closure.
Yes, after registering your business name with DTI, you must register with BIR.
Yes, the annual registration fee is waived in 2024. However, this is only applicable for those availing of certain tax exemptions, such as new small business registrants.
Small businesses under the Barangay Micro Business Enterprise (BMBE) program are exempt from paying the BIR annual registration fee. Note that the business permit annual registration is different from the BIR annual registration fee, which should be completed on January 31.
Every year, businesses should renew their permits in their city or municipal hall before January 20. Additionally, the business permit renewal fee is different for each LGU, which can range from a few hundred pesos to several thousands. Other factors can also influence the overall fee, including business size and location.
Your business permit is valid until December 31 of each year. Upon expiration, businesses are required to renew the permit before the end of January within the following year.
The business permit and the mayor’s permit are the same. The document is the mayor’s permit because the local government issues it.
Final Thoughts
Renewing your business permit in 2024 is crucial for ensuring your business remains compliant and operational in the Philippines. A valid permit not only helps you avoid legal penalties but also keeps your business active in the competitive market.
Understanding the business permit renewal process for 2024, including the necessary requirements and fees, is essential for a smooth experience. By staying informed and prepared, you can navigate the renewal process with confidence and continue to thrive in your business endeavors.
Make sure to keep this guide handy as you approach your renewal date, and don’t hesitate to seek assistance if needed to ensure all requirements are met efficiently.
Keep Reading: GUIDE: Undergoing NBI Clearance Renewal Online in the Philippines
Leave a Reply